Purpose of the Bill

The primary aim of this bill is to enhance transparency and planning in Minnesota's capital investment process. It requires the establishment of a new forecasting procedure for state bonding bills, ensuring more informed decision-making by the governor and the legislature regarding state debt and borrowing capacity.

Main Provisions

• Debt Capacity Forecast: The bill specifies that twice a year, in February and November, the commissioner must prepare a forecast detailing the state’s existing debt capacity. This forecast should include:

  • Past and predicted debt service amounts for a span of eight years (including two prior, the current, and the next six fiscal years).
  • Information about already authorized but unissued debt.
  • Projected borrowing capacity for the upcoming six fiscal years.

• Bonding Bill Forecast: The commissioner is also tasked with preparing an annual forecast for the state general obligation bonding bill. This forecast must be shared with the governor and legislature and should:

  • Detail the maximum feasible amount of general obligation bonds the state can issue and sell by the upcoming November 1.
  • Ensure that the debt service cost from these bonds does not exceed 2.5 percent of the total nondedicated general fund revenues.

Significant Changes to Existing Law

The bill amends existing Minnesota statutes by requiring the inclusion of a bonding bill forecast, alongside the current requirement for debt capacity forecasting. This adds a new layer of oversight to control the state’s debt service levels and prevents excessive borrowing beyond budgetary capacities.

Relevant Terms

• Debt capacity
• Bonding bill forecast
• General obligation bonds
• Debt service
• Nondedicated general fund revenues